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Kai En (Shanghai) bankruptcy from a teacher's perspective
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Would you have left after:
The first payment postponement?
31%
 31%  [ 7 ]
The first salary delay?
18%
 18%  [ 4 ]
The second salary delay?
45%
 45%  [ 10 ]
When you realised you were well and truly shafted and it was too late...
4%
 4%  [ 1 ]
Total Votes : 22

Author Message
dmanuk



Joined: 02 Dec 2007
Posts: 33

PostPosted: Tue Dec 15, 2009 5:09 pm    Post subject: Kai En (Shanghai) bankruptcy from a teacher's perspective Reply with quote

Hi everyone,

As those of you in Shanghai may have already found out through the local media, Kai En English has wound up, thanks to inept management and...ummm...I'm not sure what else.

Now, I am currently a teacher at this school, and am wondering what my options are. Between me and my girlfriend, we are owed around 40,000RMB.

To give you all a bit of background into the situation - the school, Shanghai's oldest foreign owned English language training center, has been facing some financial difficulties for the past 8/9 months or so. The corporate division has remained fairly successful, but the 5 schools have seen a dramatic fall in class sizes since levels of around one year ago.

The first that those within the company knew of the financial difficulties was when salary payments were postponed by fifteen days (from the 23rd of each month, working one week in hand, to the 15th of the next month, effectively working three weeks in hand). Although this was a difficulty at the time, for the majority of teachers this was not a huge issue. However, at the meeting that this suggestion was proposed, the owner was recorded as saying, "if teachers can't learn how to budget, *beep* them."

This should have really been the first warning sign to get out...but people being people, they trusted that a new Managing Director who joined the company at this time could help alleviate the problems and guide the company to a long and prosperous future.

Fast forward till around April '09...Salary payments have been delayed unexpectedly, with a note from HR saying that this is a temporary problem and will not happen again. Payments are made around 4 days later.

May '09...Same thing again, but this time payment is around 8 days later.

June '09...guess what! salary payments delayed, and travel reimbursements become lost in the system.

Cutting a long story short (because it gets a little repetitive saying the same thing happens month after month)...

November 15th, all payments come through on time (with the exception of travel reimbursements and bonuses). This comes after a near staff uprising the previous month at HQ which lasts until 2am. During this this uprising, it becomes clear that only foreign teachers have been getting paid (late). Local staff, including teachers, Course Consultants and administrative staff have not been paid for several months, causing extreme difficulties for those involved.

From Nov. 15th, staff are assured that new investors have been found by the owners in Ireland, and funds are on the way for the future to ensure the continued viability of the business. Staff are somewhat reassured, although doubts remain. Still...people be people...

Monday. I go to the office to try and get reimbursement for my new Residents Permit. Look in the office, and nobody is there. Call HR and am told that they are now scared to come to the office as, "gangsters came in last Friday looking for money, and the owners have been missing for the last fifteen days".

Worry.

Tuesday - payday. No money forthcoming, realise everything has gone *beep* up. Worry more. Get calls from students, colleagues and friends saying my company is on TV. Obviously, no news is good news, and so this news is bad news.

Anyways...this is an edited version of the past few months in Kai En. However, I believed in the company, and thought that things would turn right in the end.

How wrong I have been.

I'm not really sure what more to say, and after tonight I will be writing a much more detailed description of what went down and perhaps pointing out when and where I should have got out.

I guess I'm writing this as a warning to people.

I guess I'm writing this as a way to console myself and just try and put things down on print as it were to see if I can rationalise whats happened.

I guess I'm writing this because I'm now unemployed, as are many other extremely capable teachers and admin staff and have nothing better to do.

This is not a story asking for sympathy - I'm aware that when I saw the warning signs I should have just left and got out while I could, but when you believe in the company and the people that you work with, and that between you things can only get better if you work hard enough...

Well, I guess that sometimes in life you're wrong.

Thanks for reading this.

dman
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thefuzz



Joined: 10 Aug 2009
Posts: 271

PostPosted: Tue Dec 15, 2009 6:12 pm    Post subject: Reply with quote

That's a tough situation, man, but hang in there...

It's interesting to see Linguaphone close down and now Kai En...I was actually offered a job with Kai En back in July of this year (working for the corporate training division in a management position), but after talking with the foreign boss man and hearing him complain how hard it is to make money during/after the recession I thought against signing my name on the dotted line...and boy was that the right decision.

I wonder which big company is going to bite the dust next?

At least you're in Shanghai where it's easy to find some part-time work to pull you through this hard time...hang in there and keep us updated if you hear any news.
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The Ever-changing Cleric



Joined: 19 Feb 2009
Posts: 1523

PostPosted: Tue Dec 15, 2009 11:53 pm    Post subject: Reply with quote

a classic case of "shaft the employees and clients for as much money as we can till the bitter end."

40,000 is a lot of money to lose. hopefully you have enough on hand to get you thru till you find new work.

i do hope you learned from your misplaced trust in this company. next time please heed the numerous warnings.

btw, keep your eyes and ears open. sometimes the people who led these companies into the ground spring up somewhere nearby with a new business. you may never see your money again but you might have a chance to tell whoever it is what an *beep* they are. that's worth something.

hopefully things are looking up for you soon. good luck.
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Jiordano



Joined: 22 Oct 2009
Posts: 6

PostPosted: Wed Dec 16, 2009 5:19 am    Post subject: Reply with quote

I think you need to be aware of the first few signs of trouble:-

1. Delayed or withheld payments of salaries
2. Excuses and re-assurances
3. Having teenagers as students in an Adult centre

The first sign of these means that there is trouble.

I respect people like you who put faith and committ to the company despite these warning signs. However, when it is time for the company to revert, they don't. Just be aware in the future.
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samhouston



Joined: 17 Jan 2007
Posts: 417
Location: LA

PostPosted: Wed Dec 16, 2009 12:23 pm    Post subject: Reply with quote

More at Shanghai Expat...

http://www.shanghaiexpat.com/MDForum-viewtopic-t-102917.phtml
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norwalkesl



Joined: 22 Oct 2009
Posts: 366
Location: Ch-Ch-Ch-Ch-China

PostPosted: Wed Dec 16, 2009 2:24 pm    Post subject: Re: Kai En (Shanghai) bankruptcy from a teacher's perspectiv Reply with quote

dmanuk wrote:
the school...has been facing some financial difficulties for the past 8/9 months or so.

The first that those within the company knew of the financial difficulties was when salary payments were postponed by fifteen days (from the 23rd of each month, working one week in hand, to the 15th of the next month, effectively working three weeks in hand). the owner was recorded as saying, "if teachers can't learn how to budget, *beep* them."

This should have really been the first warning sign to get out...but people being people, they trusted that a new Managing Director who joined the company at this time could help alleviate the problems and guide the company to a long and prosperous future.

Fast forward till around April '09...Salary payments have been delayed unexpectedly, with a note from HR saying that this is a temporary problem and will not happen again. Payments are made around 4 days later.

May '09...Same thing again, but this time payment is around 8 days later.

June '09...guess what! salary payments delayed, and travel reimbursements become lost in the system.

{More of the same}


You have learned a valuable lesson, one that cost you about 40,000RMB.

I am a complete jerk about matters like this.I am not paid ONCE or delayed for any reason and I am gone.Culture, country, I do not care.

Business on planet earth is Business.If they cannot pay then they cannot generate sales, which means that they are not a going concern. It is about money. All business owners understand this regardless of country, nationality or language. No revenue == death.

You were correct. At the first sign of trouble you should have left.

This situation is so far beyond recovery that any advice I would give would be 10 months out of date and wasted. Perhaps you can spend some time and money pursuing legal or local enforcement matters through some watchdog agency, but my gut tells me that you should find new work and write off the 40,000 as a total loss and move on.

The lack of business acumen on this forum just stuns me sometimes.

Business 101: You are not paid, you leave.

There are no explanations or reasons, ever. No pay==gone.
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therock



Joined: 31 Jul 2005
Posts: 1266
Location: China

PostPosted: Thu Dec 17, 2009 5:49 am    Post subject: Re: Kai En (Shanghai) bankruptcy from a teacher's perspectiv Reply with quote

norwalkesl wrote:
I am a complete jerk about matters like this.I am not paid ONCE or delayed for any reason and I am gone.Culture, country, I do not care.


Best advice!!! Attention newbies this is what you do when the school tries to screw you, don't stick around for another 3 or 4 months hoping the situation will get better. No pay/ no proper working documentation = no work - simple as that!!
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norwalkesl



Joined: 22 Oct 2009
Posts: 366
Location: Ch-Ch-Ch-Ch-China

PostPosted: Fri Dec 18, 2009 5:11 am    Post subject: Reply with quote

I posted to a Japan(?) thread a detailed breakdown of what to do and when, but your short quote gets to the point.
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sharpe88



Joined: 21 Oct 2008
Posts: 226

PostPosted: Fri Dec 18, 2009 10:31 am    Post subject: Reply with quote

It sucks but late salaries are par for the course from a Chinese employer (and even some foreign companies in China). If it bothers you, don't work here or find an employer with a rep for paying on time.
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izzy272



Joined: 16 Jul 2004
Posts: 29
Location: Shanghai

PostPosted: Fri Dec 18, 2009 8:25 pm    Post subject: Reply with quote

I just wanted to say something here. Do not let my small post count fool you I have been around China for many years now. I just do not come on this board anymore.
To set the record straight. KaiEn was not losing money when Brain left town. Sure their market share droped but that was because of poor management. The funds were there to pay rent and staff on time and in full. Brain simply held back the money so he would have more to steal.
To the people who are owed money. On a personal level I am sure you are all nice people and I truly feel bad that you got the shaft here. However KaiEn was a bottom feeder the type of place that gives English schools a bad name. You were in the wrong place at the wrong time.
To anyone who is reading this please note. The labor board will always take the employees side. If you are not being paid that means that the taxes are not being paid. That they care about.
Even If your employee comes to you and tell you a week ahead of time you will be paid late go and get another job. I am in my 50ís and have never been paid late in my life. It is just not how things are done.
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A'Moo



Joined: 21 Jan 2007
Posts: 1067
Location: a supermarket that sells cheese

PostPosted: Fri Dec 18, 2009 8:52 pm    Post subject: Re: Kai En (Shanghai) bankruptcy from a teacher's perspectiv Reply with quote

dmanuk wrote:
Hi everyone,

As those of you in Shanghai may have already found out through the local media, Kai En English has wound up, thanks to inept management and...ummm...I'm not sure what else.

Now, I am currently a teacher at this school, and am wondering what my options are. Between me and my girlfriend, we are owed around 40,000RMB.

To give you all a bit of background into the situation - the school, Shanghai's oldest foreign owned English language training center, has been facing some financial difficulties for the past 8/9 months or so. The corporate division has remained fairly successful, but the 5 schools have seen a dramatic fall in class sizes since levels of around one year ago.

The first that those within the company knew of the financial difficulties was when salary payments were postponed by fifteen days (from the 23rd of each month, working one week in hand, to the 15th of the next month, effectively working three weeks in hand). Although this was a difficulty at the time, for the majority of teachers this was not a huge issue. However, at the meeting that this suggestion was proposed, the owner was recorded as saying, "if teachers can't learn how to budget, *beep* them."

This should have really been the first warning sign to get out...but people being people, they trusted that a new Managing Director who joined the company at this time could help alleviate the problems and guide the company to a long and prosperous future.

Fast forward till around April '09...Salary payments have been delayed unexpectedly, with a note from HR saying that this is a temporary problem and will not happen again. Payments are made around 4 days later.

May '09...Same thing again, but this time payment is around 8 days later.

June '09...guess what! salary payments delayed, and travel reimbursements become lost in the system.

Cutting a long story short (because it gets a little repetitive saying the same thing happens month after month)...

November 15th, all payments come through on time (with the exception of travel reimbursements and bonuses). This comes after a near staff uprising the previous month at HQ which lasts until 2am. During this this uprising, it becomes clear that only foreign teachers have been getting paid (late). Local staff, including teachers, Course Consultants and administrative staff have not been paid for several months, causing extreme difficulties for those involved.

From Nov. 15th, staff are assured that new investors have been found by the owners in Ireland, and funds are on the way for the future to ensure the continued viability of the business. Staff are somewhat reassured, although doubts remain. Still...people be people...

Monday. I go to the office to try and get reimbursement for my new Residents Permit. Look in the office, and nobody is there. Call HR and am told that they are now scared to come to the office as, "gangsters came in last Friday looking for money, and the owners have been missing for the last fifteen days".

Worry.

Tuesday - payday. No money forthcoming, realise everything has gone *beep* up. Worry more. Get calls from students, colleagues and friends saying my company is on TV. Obviously, no news is good news, and so this news is bad news.

Anyways...this is an edited version of the past few months in Kai En. However, I believed in the company, and thought that things would turn right in the end.

How wrong I have been.

I'm not really sure what more to say, and after tonight I will be writing a much more detailed description of what went down and perhaps pointing out when and where I should have got out.

I guess I'm writing this as a warning to people.

I guess I'm writing this as a way to console myself and just try and put things down on print as it were to see if I can rationalise whats happened.

I guess I'm writing this because I'm now unemployed, as are many other extremely capable teachers and admin staff and have nothing better to do.

This is not a story asking for sympathy - I'm aware that when I saw the warning signs I should have just left and got out while I could, but when you believe in the company and the people that you work with, and that between you things can only get better if you work hard enough...

Well, I guess that sometimes in life you're wrong.

Thanks for reading this.

dman

Sorry, a little unclear. You list that all payments come through in November, but you are still owed 40,000y? Please elaborate...
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The Ever-changing Cleric



Joined: 19 Feb 2009
Posts: 1523

PostPosted: Sat Dec 19, 2009 1:04 am    Post subject: Re: Kai En (Shanghai) bankruptcy from a teacher's perspectiv Reply with quote

A'Moo wrote:
dmanuk wrote:
Hi everyone,

As those of you in Shanghai may have already found out through the local media, Kai En English has wound up, thanks to inept management and...ummm...I'm not sure what else.

Now, I am currently a teacher at this school, and am wondering what my options are. Between me and my girlfriend, we are owed around 40,000RMB.

.....

November 15th, all payments come through on time (with the exception of travel reimbursements and bonuses).

Well, I guess that sometimes in life you're wrong.

Thanks for reading this.

dman

Sorry, a little unclear. You list that all payments come through in November, but you are still owed 40,000y? Please elaborate...

both he and his girlfriend seem to have been cheated out of the final month of salary and the reimbursement for the air tickets (one of the benefits that wasnt paid out on November 15th).

air tickets would be at least RMB10,000 each and since its a training centre, I could see each of them being out about RMB10,000 of salary since November 15th.

that looks like 40,000 to me.
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norwalkesl



Joined: 22 Oct 2009
Posts: 366
Location: Ch-Ch-Ch-Ch-China

PostPosted: Sat Dec 19, 2009 1:19 am    Post subject: Reply with quote

izzy272 wrote:
Brain simply held back the money so he would have more to steal.


Yes,but the signs and symbols of impending collapse are still the same.What the owner is doing with the money does not matter. When they begin to say what this story reveals, they are either 1) out of money or 2) going to bolt and take what money they can steal.

The verbiage and warnings signs are the same in both cases.
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brsmith15



Joined: 12 May 2003
Posts: 1142
Location: New Hampshire USA

PostPosted: Sat Dec 19, 2009 2:46 am    Post subject: Reply with quote

After spending 40+ years in the business circles and doing just about everything you can do from cleaning toilets, delivering mail, starting companies, running companies, consulting with everyting from one-person shows to Fortune 500 joints, lecturing around the US, Canada and China, writing and...yeah, teaching. Something dawned on me, and I'm certainly not the first to arrive at this conclusion.

Ask a banker or an accountant why a business failed and they'll say, "It ran out of money." Their statement is true as far as it goes, but it's like asking an admitting young intern who's examing a DOA with an ice pick stuck deep into his ear why the patient died. "His heart stopped." Both answers are correct as far as they go, but they don't get to the "heart" of the matter.

Businesses fail because of a marketing flaw, at least 96% of them according to D&B -- wrong pricing, failure to comunicate properly, lack of or faulty marketing research, product flaws, strong competitors. I'm willing to bet that our two erstwhile schools bit the dust for the smae reasons. They simply didn't know how to get to their markets and to give their present and potential customers what they want(ed).

So what you observe when the wolf is at the door are those in charge stealing what's left. If you run a business properly, you can steal, but only up to a point. Cut off small pieces of a person's skin and they'll recover, but keep it up and their system can't rebuild.

If anyone wants, please PM me with your email address and I'll send you my PPT presentation, "Why Businesses and Products Fail." I only ask if you take it to use yourself, you give me a small credit.
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Renegade_o_Funk



Joined: 06 Jun 2009
Posts: 125

PostPosted: Sat Dec 19, 2009 5:59 pm    Post subject: Reply with quote

If you are in one of the big 3 cities, I imagine being even a somewhat experienced teacher, you have your pick of the training centers that are paying minimum 150-200 per hour.

I can sit in my underwear at home and teach groups of 2-3 people via webcam in beijing for 100 an hour Rolling Eyes Not that I do that..but it's a good example of how easy it is to find some new work. I would be gone with the wind if I had to go a month without my salary, or if they had played with my salary for several months.
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